Strong retail and services sectors driving Northern Ireland economy
Northern Ireland’s economy is continuing to witness a boom — fuelled by strong retail and services sectors. The private sector here notched up 12 consecutive months of growth in April, according to the latest Ulster Bank purchasing managers’ index.
It outstripped almost every other region in the UK bar the East Midlands and east of England.
But while the high street and services sector — which includes everything from restaurants to accountancy firms — performed well, manufacturing and construction suffered a slump.
Both contracted slightly last month, with Ulster Bank’s chief economist Richard Ramsey warning that an overall slowdown in UK manufacturing is “somewhat concerning”, and could impact on Northern Ireland.
“While the rates of expansion in business activity and new orders eased relative to the 18-month highs recorded in March, the pace of growth remained relatively strong,” he said.
“Furthermore, the rates of growth in new orders, business activity and employment among local firms exceeded the UK average.
“The UK’s private sector output expanded at its weakest growth rate in three years in April with the services and construction industries posting subdued rates of activity.
“Meanwhile, UK manufacturing fell into contraction territory for the first time in over three years.
“The UK economic slowdown is somewhat concerning and if sustained will impact on Northern Ireland in due course.”
Overall, Northern Ireland’s output rose at a faster pace than seen across the UK as a whole.
Cost inflation also increased quicker in April, with the introduction of the National Living Wage reported to have contributed to a quicker rise, with firms raising their output prices.
On the jobs front, there was increased hiring in Northern Ireland, extending the sequence of growth
And the rate of job creation accelerated to a three-month high.
“Northern Ireland’s growth performance remains reliant on services and retail. Retailers continue to report the fastest rates of job creation,” Mr Ramsey said.
“Last month the construction sector joined manufacturing in contraction territory. This is evidence of the slowdown in the UK construction market impacting on local firms working in the Great Britain market.”
He said that while the rate of growth remained strong, it still lagged behind the pre-downturn performance.
“The performance of the UK economy is the most significant influence on the local economy. From this perspective, the marked slowdown in the UK economy, coupled with the uncertainty linked to the forthcoming EU referendum, is perhaps somewhat worrying.”